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Companies pick up 41% stake in BSE from demutualisation

Companies pick up 41% stake in BSE from demutualisation
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First Published: Sun, May 13 2007. 11 53 AM IST
Updated: Sun, May 13 2007. 11 53 AM IST
Mumbai: State Bank of India and Life Insurance Corporation are among the front runners to pick up stake in Bombay Stock Exchange, which has to demutualise by 19 May.
Under demutualisation, the bourses has to offload 51% of the stake in the stock exchanges owned by 790 brokers.
The Stock Exchange has already offloaded 10% stake to Deutsche Bourse and Singapore Exchange Limited and the remaining 41% has to be sold by next week.
BSE has received interest from over 20 leading domestic and foreign financial institutions for offloading remaining 41% stake.
The long overdue announcement of the remaining 41% stake is likely next week, a BSE official told PTI.
The BSE is keeping the names of the companies which have applied for picking up stakes under wraps but indication are SBI, LIC and Bank of India are among 20 companies and FIs that have applied for.
“We cannot divulge the names since approvals from regulatory bodies like RBI and SEBI were still in the process,” BSE MD & CEO Rajnikant Patel said.
The Exchange said the response is overwhelming from investors across the globe and India to purchase the 41% equity.
The 20 applicants included leading domestic financial institutions, foreign funds domestic corporate houses and reputable high networth individuals. They add up to more than the 41% equity on offer.
“The new ownership pattern of the exchange will significantly strengthen its institutional character. In the new framework, the Exchange is indeed well poised to energetically pursue business growth,“ Patel said, after the recent Board meeting held on 12 April.
However, the two bourses that have invested Rs189 crore each in BSE haven’t been given a representation on its board.
BSE’s Board of 12 Directors formulates larger policy and exercises overall control.
Day to day operations of the BSE is run by a 24 member management team headed by its MD & CEO.
Earlier, BSE sold five per cent stake each to Deutsche Borse and Singapore Exchange Ltd (SGX) during the past two months at the rate of Rs5,200 per share.
BSE is keen to develop new business opportunities in tie- up with the two leading stock exchanges. Deutsche Borse enjoys leadership position in the world in derivatives trading where BSE is losing out to its rival National Stock Exchange of India.
SGX will bring Asian advantage to BSE and is expected to complement its tie-up with Deutsche Borse.
With exchange business becoming increasingly global both BSE and NSE are likely to introduce new products.
Foreign stock exchanges will help in bringing foreign companies on BSE and NSE trading platform.
BSE’s rival NSE which was the world’s first demutualised exchange recently offloaded 26% stake allowed under FDI quota to a group of investors including NYSE Group, Goldman Sachs, General Atlantic and Japan’s Softbank Asia Infrastructure Fund.
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First Published: Sun, May 13 2007. 11 53 AM IST
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